The smart home system linearly drives leading enterprises to expand horizontally in many fields of business. The company is a leading global enterprise that drives smart homes linearly, and this business accounts for nearly 70% of revenue. After more than 20 years of deep industry cultivation and technology accumulation, the company has also expanded its products horizontally to applications such as smart offices, car tailgates, and medical care.
The company's past performance has been excellent. The compound growth rate of the company's revenue in 2015-2019 exceeded 30%, and the ROE level remained above 30%. In 2019, the company's operating income reached 1.22 billion, and net profit attributable to the parent company reached 220 million.
In line with the trend of consumption upgrading and intelligence, the linear driving industry is a long-term golden race track, and Chinese enterprises are expected to compete globally. The linear drive system is a linear motion automated actuator. It has many advantages such as novel and exquisite design, small size, safety and reliability. It can bring users a comfortable, convenient and user-friendly experience. It has been widely used in the home, office, industrial and medical fields. Technavio estimates that the global market size in 2020 will be about 2.3 billion US dollars. As an intelligent transmission control system, linear drive is also an important part of the IoT system. Under the intelligent trend, air pressure and hydraulic drives will be replaced in more light load scenarios in the future. At present, European companies are still leaders in linear drive technology; domestic enterprises have now achieved a reversal in the fields of home and office applications, and it is hoped that they will achieve greater breakthroughs in demanding industrial, medical and other fields in the future.
Pre-listing production capacity bottlenecks constrained the company's development, and office and automotive applications will help the company take off for the second time. The capacity utilization rate of all production lines of the company exceeded 100% in 2019, and the IPO fund-raising project will effectively ease the company's production capacity bottlenecks.
After the fundraising project reached production, the company's smart home drive system revenue is expected to expand 1.7 times that of 2019, continuing to occupy a leading position in the industry; the smart office drive system field is highly prosperous, and the fund-raising project is expected to expand revenue to 2.6 times that of 2019; the company has accumulated deep technology in the field of automobile electric tailgate drives and has cooperated with many mainstream OEMs to establish projects. The fundraising project is expected to expand electric tailgate revenue to 8.29 times in 2019. The explosion of corporate office and automotive applications in the next few years will help the company take off a second time.
Profit forecasts and investment recommendations. The linear drive industry is in a golden development period. The launch of the company's IPO fundraising project will effectively ease the company's production capacity bottlenecks. In particular, the office and automotive application fields will usher in high growth. It is predicted that the company's net profit returned to the mother in 2020-2022 will be 224 million yuan, 301 million yuan, and 351 million yuan, corresponding to PE27/20/17 times, giving the company a 30-fold valuation in 2021, corresponding to the target price of 180.60 yuan, covering the “buy” rating for the first time.
Risk warning: the risk of trade frictions between China and the US; the epidemic repeatedly affects downstream demand; market competition intensifies; the risk that the progress of fund-raising and production capacity will fall short of expectations.
